Ask a few people to locate Mauritius on a globe and give them of plenty time to figure it out. Many may find it eventually, but not without facing a tough time in locating the tiny nation. Placed 180th in the list of largest countries in the world with a population less than any regular village in India, Mauritius’s status of even being a nation was doubted. The population living there is majorly of Indian origin and the only way they make money is from their tourism sector. Though we get a picture that Mauritius is an average, tiny and economically crippled nation, it shockingly has been the biggest foreign investor in India.
39% of the foreign money poured into India has been invested by Mauritius. This must actually be considered in the Guinness Book of World Records, but there is actually something fishy that halts its repertoire. Mauritius has been the biggest investor in India because of Double taxation laws and an evil nexus of corrupt people.
The channelization of foreign money into India via any company in Mauritius is known as the ‘Mauritius route’. This part is completely fine, but the process and procedure is what makes this route a golden path for corruption. This route is designed to convert black money into white, by evading tax- legally.
The government of India came up with the idea that Mauritius is a friendly, economically crippled nation and many Indians reside over there so, giving them economic provisions would financially assist them. This is not actually the crystal truth; this is actually a smokescreen or a notion that is serialized to misguide the masses.
Process and procedure
The idea deployed to get foreign investment in India from Mauritius is more than harmful for the former. But, because our corrupt ministers are involved in this swamp- it is being continued. The procedure of investing and the process of converting white money into black is so well encased that general minds won’t understand. The process and procedures for eligibility are…
– Any company in Mauritius having a name, an office and a telephone number is eligible to invest in India via the Mauritius route.
– The name of the owner may or may not be disclosed, Indian authorities cannot demand the identity of the owner. This rule is the confirmation that many of our politicians are investing billions of dollars via Mauritius. Word is also that goons like Dawood Ibrahim and Tiger Memon invest via this route.
How black money is converted to white?
The tones of cash accumulated by corrupt individuals cannot be physically hidden for long. Moreover, if money cannot be invested what’s the use of having it? It has to be converted into white and the Mauritius route is designed for that purpose only.
– The tonnes of cash are physically transferred to Mauritius.
– A company is registered (in Mauritius a company can be registered by confirming a capital of $1 only) in Mauritius.
– Hotels, businesses and tourist services are setup on a small scale (for the namesake we may assume).
– A portion of all the cash that is physically transferred to Mauritius is shown as the profit to Mauritius authorities. 1% income tax has to be paid.
– As soon as the Income Tax is paid, that company invests in Indian stock market by providing its money to an Indian company.
– The Indian company invests and after one year the money is withdrawn. According to Indian law, Long Term Capital Gains Tax is 0% so all the money that was invested becomes tax free.
– The Indian company lends the money back to the Mauritius Company. On most occasions the people handling the Mauritian as well as the Indian companies are the same and they know that they are avoiding tax.
– The physical cash (black money) is now completely converted to white as it is drawn from a stock market. Even worse is the fact that all this money becomes white without any tax deduction.
– Underworld goons, international mafia etc are involved in this circuit. Indian politicians are to be blamed for encouraging such laws; they are also responsible for removing black money from Swiss bank and utilizing Indian money to make their own profit.
6 organizations have so far petitioned against this route. It was opposed in the High Court and an inquiry was ordered. But, nothing substantial has happened yet. If this route continues to function, all the black money that are stored in private banks will become white (legal) and no black money will ever come back to India!